Outsourcing

Citizens Bank in Rhode Island has offered its IT employees solid middle-class wages and good benefits, but this slice of the America Dream is ending for many of them.

Bank IT employees are training replacements in India to take over their jobs. IT employees who were contacted say this "knowledge transfer" is being accomplished remotely, over the Web and in a teleconferences.

In June, IBM announced that it had signed a five-year IT services agreement with Citizens Bank. The agreement, said IBM, "will help Citizens drive greater efficiencies, improve service and lower cost." IBM runs a large operation in India, where the pay is but a fraction of U.S. worker salaries.

The number of layoffs is in dispute. Employees said as many as 150 Citizen Bank IT workers were being laid off. But this number doesn’t include contractors. IBM will be consolidating the bank’s IT infrastructure services, and, as part of that, the bank is consolidating from four vendors to one vendor, IBM. This change will result in the elimination of some contractor jobs, and when contractors are added, the total layoff estimate by employees ranges from 250 to 350. Computerworld interviewed four Citizen IT employees: Two were interviewed by phone, and two by email and only on condition of anonymity.

A bank spokeswoman, however, cited a much lower figure and said that approximately 100 employees and contractors, combined, are affected by the layoff.

"Some of the colleagues affected by these changes are being offered comparable positions with IBM," said Lauren Digeronimo, a bank spokeswoman, in an email. "The remaining colleagues are receiving priority consideration for open positions as we continue to hire in other parts of the bank," she said.

The employees who were contacted expressed skepticism that they will find other jobs at the bank or at IBM. IT managers were staying on, and of the jobs that IBM offered, many appeared to be for short-term contracts. Moreover, no one knew of anyone offered a new job at the bank. The bank did not provide details of the job openings.

The bank's IT environment is complex, and includes mainframe, AIX, Solaris and Linux operating systems. Employees wondered how deep institutional systems knowledge, which is often limited to the people who work on specific systems, will be transferred.

Citizens Bank has previously used offshore contractors, including Infosys and Accenture, both of which have employed H-1B workers at Citizen sites, according to government records. But the IBM contract, and its consolidation of existing contractors, may be the bank's largest IT outsourcing engagement yet. IBM was asked about its use of remote training to accomplish offshore training, but declined to comment.

"IT outsourcing has become so commoditized today, it's pretty commonplace for offshore worker training to be conducted almost entirely online and using video," said Phil Fersht, the CEO of HfS research, a consultancy and IT services research firm.

"The shipping of people backwards and forwards between India and the U.S. is definitely slowing down," as communication tools and training apps have improved, Fersht said.

Donna Conroy, the executive director of Bright Future Jobs, an advocacy group for IT workers, has heard from some of the Citizen IT workers.

"This is the first I've heard of exclusive use of web sessions for knowledge transfer," Conroy said. "IBM may have tailored this specifically for Citizens Bank to avoid any public backlash that may clash with Citizens Bank's recently launched marketing campaign called 'Ask a Citizen,' featuring real-life Citizens' employees." But, she said, "the public won't be fooled by this latest deceit."

One Citizen IT employee who is set to lose his job questioned how the U.S. will prosper as it shifts work overseas. A lot of people lost their jobs as manufacturing moved overseas, and computers emerged as "the next big thing," said this worker.

"The manufacturing jobs haven't really come back, save for some smaller companies who wish to make, or at least assemble, their products in the U.S., and now with companies getting rid of American tech workers for foreign workers ... then what? What industry is left or what industry do we shift to?" said the IT worker.

"IT was supposed to be the 'future,' but now even that is being taken away by greed and avarice by companies who have no foresight into the future beyond their next quarter profits," the IT worker said.